RBS bailout plan approved by EU

The European Commission today approved massive government cash support and major restructuring plans for Royal Bank of Scotland – the largest state aid package to any company in the EU’s history.

The plan to tackle “toxic debts” and bail out the bank is worth between £60bn (€66.6bn) and £100bn (€111bn), a Commission spokesman said.

The deal requires RBS – one of Europe’s largest financial services groups – to pay significant restructuring costs and sell off some of its businesses to limit distortions of competition.

EU Competition Commissioner Neelie Kroes made clear today that Brussels could demand more cutbacks at RBS if it does not deliver on its agreed cuts by 2013.

Ms Kroes said: “This case is one of the most complex the Commission has had to deal with during the financial crisis. I am very pleased with the result.

“The Royal Bank of Scotland will take a number of significant steps to return to long-term viability.

“RBS will itself pay a sufficient share of the restructuring costs and distortions of competition will be limited by substantial divestments.”

She went on: “I wish a better and more sustainable future for this bank – but be aware that in case RBS does not deliver on its balance sheet reduction targets by 2013, the Commission will be able to intervene again and more divestments will be required.”